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The Mercer CFA Index ranks the efforts of pension systems around the world. The methodology is simple: the country's pension schemes are scored against three aspects, namely adequacy, sustainability, and integrity, which account for 40%, 35%, and 25% respectively. The results in each section are combined to calculate the final score. Grades from A (best) to E (worst) are also given, according to the score.
Curious? Click through to find out which countries have the best and worst pension systems.
At the bottom of the Mercer list, we have India with an overall score of 44.0 points. The nation scored the lowest of any country in the adequacy measure. India has high rates of informal employment, so pension coverage is limited.
The South American nation comes next with a score of 45.5 points. Argentina's system comprises a basic pension and earnings-related contributions. Men retire at age 65, and women at age 60.
The Philippines’ score had a small increase from 45.2 in 2023 to 45.8 in 2024. To qualify for the nation's basic pension scheme, public sector workers need to pay into it for at least 180 months, while private sector workers need to pay into it for 120.
Turkey scored 48.3 points in the Mercer index in 2024. The nation scored poorly in the sustainability measure in particular. Retirement age in Turkey is 60 for men and 58 for women, though it will be 65 for both by 2044.
South Africa comes next on the list with 49.6 points. The nation's system includes both a public pension and tax-supported voluntary occupational schemes.
Indonesia scored 50.2 points in Mercer's index. The country is the third-worst when it comes to the adequacy measure.
South Korea increased its index value by one point from last year to 52.2 in 2024. The nation scored particularly well in the integrity sub-index, with 70.5 points.
With 53.4, Austria is the lowest-ranking European nation in the index. While adequacy and integrity had good scores, with 67.2 and 75.2 respectively, the country scored poorly for sustainability, with just 22 points.
Peru places next in the ranking with 54.7 points. All pension contributions are made by employees only. Unlike some other nations, employers do not pay into pensions directly.
The Southern European nation comes next in the index with a total of 55.4 points. The country is the second worst when it comes to sustainability, where it scored 25.1 points. Italy's retirement age is 67.
Brazil scored 55.8 points. The South American nations scored pretty well in the adequacy and integrity criteria, around the 70 mark for both.
Malaysia comes next with a score of 56.3. Those working in the private sector pay into the Employee Provident Fund, which includes co-payments made by their employers. The fund, however, doesn't provide an income stream.
The US scored 60.4 points in the 2024 Mercer index. Defined contribution (DC) schemes are used by most private sector workers. America also has a public retirement scheme based on social security and lifetime earnings.
Next, we have Colombia with 63.0 points. The nation has one of the lowest retirement ages of any OECD country: 62 for men and 57 for women.
Spain has a score of 63.3 on the Mercer index. The nation has a public pension as well as a social assistance benefit. There are also a number of occupational schemes available.
UAE has an index value of 64.8. The nation ranks particularly high in the adequacy sub-index, with 77.1 points. Workers have access to both a state pension and an earnings-related scheme.
Germany comes next in the ranking with 67.3 points. The nation has a mandatory public pension scheme, but occupational pensions and voluntary private schemes are also widely used.
France scored 68.0 points in the index. The country scored particularly well for adequacy with 84.8, and integrity, with 75.7. Retirement age has recently risen from 62 to 64.
Ireland comes next with a score of 68.1. Irish workers have access to a flat-rate social security pension scheme paid at age 66. Those who haven't paid enough contributions can access a means-tested benefit.
Canada scored 68.4 in the Mercer index in 2024. The nation has a flat-rate pension with a means-tested income supplement, as well as an earnings-related pension scheme. Additionally, there are also a number of voluntary schemes and occupational plans.
Mexico has an index score of 68.5. The country has a mandatory DC pension, as well as a means-tested safety net pension funded by the government.
Belgium scored 68.6 points in the Mercer index. The country scored high in adequacy (81.8) and integrity (87.4), but low in the sustainability sub-index (40.1).
Next on the ranking is New Zealand with 68.7 points. The country has both a universal public pension scheme and a voluntary savings scheme called KiwiSaver.
Switzerland scored 71.5 points in the Mercer index. The nation has both a public pension scheme and a mandatory occupational system.
The UK scored 71.6 in the index. In addition to the government pension scheme, there are also workplace pension schemes available. The retirement age is currently 66 but will rise to 67 in 2026.
Chile is the highest-scoring nation in all of the Americas, with 74.9 points. Chile has a universal social pension and a mandatory DC system. The country scored pretty high in integrity, with 86.5 points.
Norway is the first Nordic country on the list, but with a great score: 75.2. The nation scored pretty high in the adequacy and integrity indicators, with 77.2 and 88.3, respectively.
The next nation is also located in the north of Europe. Finland scored 75.9 in the Mercer index. The country has the highest integrity sub-index score of all countries: 90.8.
Australia’s index value is 76.7. The country has a means-tested pension and mandatory private-sector occupational schemes. Aussie taxpayers can also pay into voluntary plans.
With 78.7 points, Singapore is the highest-ranking Asian country on the list. All Singaporeans must pay into the Central Provident Fund (CPF), which is a compulsory savings and pension plan.
Israel has an index value of 80.2. It’s the first nation on the ranking rated A by Mercer. This means that it has a "first-class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity."
The third highest spot on Mercer’s index goes to Denmark with 81.6 points. The country scored high in most criteria, including sustainability (82.6), adequacy (84), and integrity (76.3).
The island nation is the runner-up in the 2024 index. Iceland scored a total of 83.4 points. Its sustainability score, in particular, is better than any other country on the list, at 84.3 points.
The country with the best pension system in the world, according to Mercer, is the Netherlands, with 84.8 points. Retirement age is 68 but there’s a lot of flexibility when it comes to benefits, which are available up to 10 years earlier.
Sources: (Mercer) (Love Money)
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The Mercer CFA Index ranks the efforts of pension systems around the world. The methodology is simple: the country's pension schemes are scored against three aspects, namely adequacy, sustainability, and integrity, which account for 40%, 35%, and 25% respectively. The results in each section are combined to calculate the final score. Grades from A (best) to E (worst) are also given, according to the score.
Curious? Click through to find out which countries have the best and worst pension systems.